Despite the economic impacts of COVID-19 across Australia, Tasmania’s residential real estate market was able to minimise the risks and dodge most bullets, allowing it to record its ninth consecutive year of growth.
The latest report from the Real Estate of Institute of Tasmania (REIT) showed that the state broke several housing records over the past year.
The state achieved a cumulative sales record of $6.2bn over the past year for more than 12,100 properties, the highest number of transactions since 2003.
On a yearly basis, home sales in Tasmania increased by 41.9%, supported by the gains seen in the three major population centres.
Median prices across the reached new benchmarks across segments, growing by 23.85% to $520,000 for houses; 23.4% to $432,000 for units; and 31.3% to $210,000 for land.
The three population centres in the state posted stellar median price gains over the year:
· Greater Hobart – up 24.9% to $699,500
· Launceston – up 24.3% to $491,000
· North West Centres – up 22.8% to $399,000
REIT President Michael Walsh said these gains reflect the “strong and robust” nature of Tasmania’s residential real estate.
“A dire shortage of properties for sale and for rent combined with an unprecedented demand for residential accommodation to live in and rent, has seen prices surge to new highs,” he said.
“The likelihood that we are not going to be able to provide the stock we need in the immediate to medium future will most probably see continued upward pressure on prices and rents.”
Who are the homebuyers in Tasmania?
First-home buyers remained active in the Tasmanian housing market.
In fact, first-home buyers remained about the same as last year, but there appears to be a shift in what they are buying.
Figures show that land sales to first-home buyers were down by 28.3% while house sales were up by 4%.
Interestingly, unit sales among first-home buyers increased the most at 12.6%.
Investors who purchased a property in Tasmania also grew over the year, up by 33.9%. However, this was still below the levels seen in 2017.
Mainland buyers increased by 54.1% but only represented 18.1% of all buyers in Tasmania.
Of the mainland buyers, 38% were investors who purchased a property at a median price of $412,000.
Mr Walsh said the significant increase in property prices over the past three years should compel the local government to review its policies surrounding housing.
“The real estate industry is acutely aware of the pressure that many face in this current market and the diminishing affordability that it brings,” he said.
“Finding a balance between demand and supply is an issue we unfortunately will have to contend with for some time to come.”
Mr Walsh said the price increases have seen significant windfalls to the government in the form of stamp duty and land tax revenues.
“These gains present an opportunity for the government to use these funds to assist the young and disadvantaged to not only put a roof over their head but to achieve the Australian dream of owning their own home,” he said.
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Photo by @sunny0725 on Unsplash
